Every limited company in the UK holds a powerful but often overlooked asset: its business credit score. This figure may not appear on the balance sheet, but it plays a significant role in shaping how a company is perceived by the outside world.

From banks and suppliers to insurers and even prospective employees, stakeholders often make early judgements based on this score.

A company's credit score is derived from publicly available data – most notably from Companies House, as well as payment history and reports from lenders and larger trading partners. It’s a reputational snapshot that informs financial risk assessments.

Crucially, this score can be influenced by a company’s behaviour and decisions. For directors who take their duties seriously – especially when it comes to safeguarding the company’s assets – it deserves closer attention.

Why does a business credit score matter?

A company’s credit rating can significantly affect how easy or expensive it is to access finance. Lenders look to the score to determine not just whether to offer credit, but also how much to offer, and at what cost. A poor score can mean higher interest rates, lower credit limits, or even outright rejection.

The score also affects trade credit – that is, how much a supplier is willing to provide without upfront payment. A company with a good credit record may benefit from more generous terms, improving cash flow and reducing reliance on borrowing. On the other hand, a weak score could trigger requests for pro forma payments or tighter credit limits.

Even non-financial providers – such as insurers, vehicle leasing companies, and technical support or maintenance firms – may use credit scores as part of their risk assessment when offering annual contracts. This means the score can influence the cost and availability of essential services across the board.

What drives a company credit score – and how to improve it

There are several practical ways directors can manage and improve their company’s credit score.

1. Behavioural factors: filing annual accounts and confirmation statements on time at Companies House signals stability and good governance. Consistently paying suppliers within agreed terms reinforces a company’s reliability. Not exceeding finance facilities and keeping to the terms of loan agreements – such as meeting repayment schedules and maintaining agreed covenants – also supports a strong credit profile.
2. Financial performance: the headline numbers matter. Profits, positive cash flow, and a solid balance sheet all help build confidence in the business. Sometimes, the financial statements filed at Companies House may show a decline, for example if there have been large dividends, pension contributions or a restructuring. The credit reference agencies’ algorithms take these accounts at face value and may decrease the score if the accounts don’t show growth.
3. Manual reviews: many companies don’t realise that credit reference agencies are open to reviewing more detailed, non-public data and under the Consumer Credit Act, they are required to do so. Supplying full statutory accounts, recent management accounts, cash flow forecasts and even order books can lead to a revised, and often improved, credit rating – especially if recent progress isn’t yet visible in official filings. Capitalise provides a Credit Review Service for accountants to offer their clients, which has a 96% success rate for increasing a credit score, in only a matter of days.

Maintaining a strong business credit score isn't just about finance – it's about reputation, resilience and opportunity.

For accountants advising company directors, it’s a valuable area to monitor and optimise. After all, it's one of the few intangible assets that really can open doors – or quietly close them. The recent updates to FRS 102, bringing operating leases on balance sheet, could have an impact on borrowing facilities of a business and early assessment of any loam covenants that may in place should be considered, together with a review of the business credit score to ensure there are no going concern implications.

For auditors, the credit score forms part of reviewing the going concern considerations and whether working capital will still be available to the company in the coming months. It also forms part of the assessment as to the management’s capability for protecting the company’s assets, internal controls and risk management.

As the power of data continues to increase for all trading companies, the credit score is becoming a key asset to focus on and its importance will only continue to grow.

Paul Surtees – Capitalise.com